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Limitations to forest ownership introduced in Lithuania

26-08-2019
 

On 22 August, 2019 the Lithuanian Parliament passed changes to the Forest law, setting up a limit of a forestland areas that can be owned by the same owner to a maximum of 1.500 ha.

The limit will take into consideration also the stakes of related parties. The specifics of how related parties are defined are, however, still unclear.

Lithuania’s total area is 6,5 million ha, where forest form 2,1 million ha. State owns 50% of forestlands, where the rest is spread among more than 280.000 owners. Around 20 individuals and legal entities currently own more than 1.500 ha of forest.

Several European countries (e.g. Sweden and Norway) have various limitations to ownership and trade of forest. Until now, however, such limitations have not applied in Lithuania.

The Presidents' office reacted negatively to the changes, saying that it will decrease the transparency of the forest sector, allow for manipulations, disturb the competition and provide better conditions for certain groups of people. Foreign embassies also expressed the concerns and asked for explanations at the president office. It is expected that forest industry related representative bodies will initiate the case at the Lithuanian Constitutional court and European Commission to revoke the law. HD Forest will be an active supporter of this initiative. 

The changes to the forest law will not impact the management of your forests and current owners of more than 1.500 ha will not be forced to sell their properties.

It is still unclear what effects – if any – this will have on the prices of forest properties in Lithuania. HD Forest will monitor the development carefully and advise our clients accordingly. Despite the new restrictions, there might be some advantages to be explored.  

The law is expected to be enforced as of 1st January 2020.

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